Week 3 Individual Assignment

Week 3 Individual Assignment - WEEK 3 INDIVIDUAL ASSIGNMENT...

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WEEK 3 INDIVIDUAL ASSIGNMENT Week 3 Individual Assignment University of Phoenix ACC 281 Eugene Ledlie May 2, 2011 E9-3 The ledger of Hixson Company at the end of the current year shows Accounts Receivable 1
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WEEK 3 INDIVIDUAL ASSIGNMENT $120,000, Sales $840,000, and Sales Returns and Allowances $30,000. Instructions (a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31; assuming Hixson determines that Fell’s $1,400 balance is uncollectible. Dec 31 Bad Debt Expense 1,400 Account Receivable (To record uncollectible balance fro Fell) 1,400 (b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable. Dec 31 Bad Debts Expense 8,100 Allowance for Doubtful Accounts (To record bad debt exp. $84,000-$30,000x1%) 8100 Bad Debts Expense 9,900 Allowance for Doubtful Accounts (To record bad debt exp. $120,000x10%-$2,100) 9,900 (c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable. Dec 31 Bad Debts Expense 6,075 Allowance for Doubtful Accounts (To record bad debt exp. $840,000-$30,000x.75%) 6,075 Bad Debts Expense 7,400 Allowance for Doubtful Accounts (To record bad debt exp. $120,000x6%+$200)
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Week 3 Individual Assignment - WEEK 3 INDIVIDUAL ASSIGNMENT...

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